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10/09/2024
Investor tips Osiris-Investissements NewsThe 3rd largest economy in ASEAN after Indonesia and Thailand, the Philippines is a dynamic country with a historically high growth rate. By 2022, the Philippine economy will have grown by 6.5%, according to the September forecasts of the Asian Development Bank (ADB).
Economic growth benefits from the lifting of travel restrictions
As a “new emerging country”, the Philippines has an economy based on industry, but also on tourism and services. These were heavily impacted by COVID-19, so the lifting of restrictions in 2022 will enable the Philippine economy to return to pre-pandemic growth.
International traffic is picking up, and hoteliers are expecting occupancy rates of over 50% in the capital of Manila during the festive season. This occupancy rate should gradually return to pre-pandemic levels by 2023. This naturally benefits services, which are one of the main sectors of activity, as well as real estate in the Philippines, particularly tourist real estate.
Stronger production growth since August
The production of manufactured goods, particularly electronic components, plays an important role in the Philippine economy.
The production volume index (VoPI) rose at a slightly faster rate of 3.5% in August, compared with the 2.4% growth recorded in July.
And in the face of rising domestic demand, industries expect to continue increasing production for September and the end of the year, according to the World Bank’s October report.
The lifting of restrictions, coupled with the good performance of Philippine industry, is a first step towards a return to a pre-pandemic economy. Growth forecasts for the Philippines are set at 6.5% for 2022 by the ADB, 1.4% higher than the ASEAN average (5.1%).
However, the Philippine economy is facing threats mainly due to the global context, with inflation weighing on energy and food prices, and exports contracting.
Contraction in exports and growth in imports
The Philippines’ main export trading partners are the United States, Japan, China, Hong Kong and Singapore.
The Philippines faced a contraction in its merchandise exports in September, which was nevertheless less significant than in August (-2.0% in September vs. -4.1% in August). This is due in particular to lower international demand during a period when supply chains are disrupted.
Imports, on the other hand, are on the rise as business picks up after the COVID-19 crisis, notably from the United States and China.
Inflation in the Philippines
Although the Philippines is not directly involved in trade with Russia and Ukraine, the impact of the invasion on global food and energy prices is being felt, with prices up 6.4% in the year to July.
However, the Philippines expects the arrival of the festive season – the peak season for tourism – to bring good international traffic and stimulate consumption, which should reduce inflationary pressure.
Growth prospects remain robust, and among the best in ASEAN
The Philippine economy grew by 8.2% in the1st quarter of this year, and is expected to grow by over 6% for the whole of 2022 and 2023.
The recovery of tourism and the good performance of Philippine industry are driving this growth. To combat an unfavorable global climate, the Philippine government plans to implement a number of improvements, notably in renewable energies, the digitization of its administration and a socio-economic agenda to develop jobs and protect Filipino purchasing power.
Real estate in the Philippines: luxury opportunities on the islands
Economic dynamism is also benefiting real estate in the Philippines, particularly tourism. In this sector, the Philippines has the advantage of being an archipelago of more than 7,000 islands with heavenly landscapes, attracting travelers looking for a wilder, “newer” destination than countries like Thailand or Indonesia (Bali).
On these islands, luxury hotels are springing up, some of which are committed to respecting this “wild” dimension by building eco-friendly resorts that respect the surrounding nature.
Feel free to contact Osiris Investissements on this link, your dedicated experts with 35 years of experience, with any questions about this article or real estate in the Philippines.
Sources :
https://www.philstar.com/business/2022/07/31/2199101/metro-manila-hotels-boost-room-takeup-47-h1
